Startups are hard, but startups in the life sciences industry are a particular brand of challenging.
When launching a business that is developing a new drug or medical device, there are the normal startup pressures plus a host additional issue such as safety, efficacy, regulation and increased data security requirements.
Making the process even more challenging, the typical life sciences startup evolves over time as it moves from development and pre-clinical trials to full-scale manufacturing. A life sciences business doesn’t just grow, it changes as the business unfolds.
These factors are why it is critical that life sciences firms have a capable enterprise resource planning system (ERP) in place from the beginning. ERP is important for manufacturers and businesses that plan for long-term growth, but it is essential for life sciences startups that must juggle so many variables and business processes with precision.
We’ve been serving the life sciences market for decades as ERP consultants, so we’ve seen what works and what doesn’t. With that in mind, here’s what you should look for when picking an ERP system for your life sciences company.
There’s a huge difference between what you need when you’re developing a new product in the lab and what you need when you scale up a manufacturing operation for go-to-market. Your needs also will change as your business grows.
So the first thing you should look for when selecting an ERP system is how well it scales as you grow the business. You want an ERP solution that can let you start small and basic, but can scale both in terms of utilization and operational complexity.
The right solution will let you scale easily without having to rip and replace your system as you grow.
A web startup doesn’t usually deal with life and death. Your business probably does.
The manufacture of life sciences products is a precision game, and tracking each drug or device that comes off the assembly line is important both for regulatory requirements and safety reasons. If something goes wrong with one of your products, whether a faulty input from a supplier or a defect during manufacturing, you must be able to pinpoint exactly where the issue occurred and what was affected for remediation purposes.
You also need the ability to accurately track any recall that might be required.
All of this requires end-to-end traceability within your ERP solution so any issue can be handled quickly and appropriately.
- Regulation and Validation Ready
Being a life sciences firm, dealing with FDA regulation is a normal part of your business. Managing these regulatory requirements is one reason you need an ERP system for your life sciences startup, but not all ERP solutions are equally prepared for the task.
Further, life sciences firms must contend with validation, the process of proving to the FDA that your ERP system tracks and handles operations in the way you expect and are required to handle them. If you’re a drug manufacturer, for instance, you don’t want your ERP system to allow ingredients from an unauthorized supplier to slip in by mistake.
Any ERP system can be validated, but some ERP solutions are set up with life sciences validation in mind. That makes the validation process faster and cheaper.
- Real-Time Reporting
The business of a life sciences firm changes rapidly, with distinct phases and new issues along the way. At each point in the growth of a life sciences firm, there will be adjustments that need to be made.
Spotting and making the adjustments in business processes and operations is an ongoing activity that requires real-time visibility into both operational and supplier data. The right ERP system will show a full picture of where your business is today, as well as analytics and reporting that hint at the adjustments that make sense.
- Cost Management Functions
Significant funding is often needed for the growth of a successful life sciences firm; launching a new drug or a new medical device rarely comes cheap, and then there’s the ramp-up for manufacturing and distribution.
Even with adequate funding, managing costs is a key concern for most life sciences businesses. Make sure that you choose an ERP system that monitors vendor pricing, the cost of materials in real-time, and other spending variables within your business.
The right system also will come with automation for flagging cost exceptions, as well as tools that help you model alternative sourcing possibilities.
- Commercialization Support
After developing a new life sciences product, firms then have the exhilarating but often chaotic ramp-up for commercialization. This includes developing supply chain, production, sales and fulfillment operations, and the ramp-up often must take place quickly.
Life Sciences firms need an ERP system that come ready for this process of going to market and even suggests best practices during spin-up. This includes manufacturing or integration with a manufacturer, 3PL integration, product planning and quality management, among many other areas.
Starting up is hard. Don’t make the process even more challenging by approaching rapid business growth with systems that aren’t built for your particular line of business. You’ve got a lot to worry about. Your backend IT systems shouldn’t be one of them.